U.S. Supreme Court Extends NPDES Permit Requirements to Indirect Discharges
The question before the U.S. Supreme Court was whether the Clean Water Act requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, in this case, groundwater. Many had hoped the Court’s answer to this question would clarify longtime ambiguity under the CWA. But given the complexity of the issue, that was not to be. It remains to be seen the full impact of the Court’s April 23 decision in County of Maui v. Hawaii Wildlife Fund, No. 18–260 (2020), but it is clear that lower courts are left with the heavy lifting. Rather than resolve ambiguity, the Court’s new “functional equivalent of a direct discharge” test will likely keep heads scratching and court dockets full in the years ahead.
The Clean Water Act forbids “any addition” of any pollutants from “any point source” to “navigable waters” without an appropriate permit from the EPA.[i] The facts of County of Maui were fairly straightforward. The County of Maui operates a wastewater reclamation facility that collects sewage, partially treats it, and pumps the treated effluent through four wells hundreds of feet underground. This treated sewage (four million gallons per day) then travels a mile or so, through groundwater, to the ocean. Environmental groups brought a Clean Water Act citizens’ suit against the County in 2012, alleging that the County was discharging pollutant from a point source into navigable water without a permit in violation of the CWA. In 2014, the district court found that a considerable amount of pollutant from the wells, which were indisputably point sources, ended up in the Pacific Ocean, which is navigable water. The district court ruled against the County, finding that the path from the wells to the Ocean was “clearly ascertainable” and that the discharge was “functionally one into navigable waters.”
Ninth Circuit Opinion
On appeal, the United States Court of Appeals for the Ninth Circuit affirmed[ii] the ruling, but created its own “fairly traceable” test to determine whether a permit is required to discharge pollutants from a point source if the pollutant passes through groundwater en route to the navigable water. The Ninth Circuit ruled that the County of Maui’s discharge was the “functional equivalent” of a discharge into navigable water. Because Courts of Appeals had not agreed as to how to resolve these issues, the Supreme Court granted the County’s petition for certiorari.
Arguments from the County of Maui
On appeal, the County argued for a “bright-line test,” under which the point source or series of point sources would be required to be the exclusive means of delivery of the pollutant to the navigable water. The County asserted that even if one nonpoint source (such as groundwater or rainwater runoff) came between the point source and the navigable water, no permit was required. In such a case, the State, and not the Federal government, possessed authority to regulate the discharge. The Solicitor General, as amicus curiae, supported this interpretation, which was the position taken in a 2019 Interpretative Statement issued by the EPA in 2019.
Supreme Court Opinion
Rather than choosing either side’s position, the Supreme Court opted for a middle ground. Authored by Justice Breyer, and joined by Justices Roberts, Ginsburg, Sotomayor, Kagan, and Kavanaugh, the majority opinion stated:
We agree that statutory context limits the reach of the statutory phrase “from any point source” to a range of circumstances narrower than that which the Ninth Circuit’s interpretation suggests. At the same time, it is significantly broader than the total exclusion of all discharges through groundwater described by Maui and the Solicitor General.
The Court began its analysis by stating that “virtually all water,” including groundwater, will eventually make its way to navigable water. Given the power of modern science, the Court continued, the Ninth Circuit’s test would allow EPA to assert jurisdiction over pollutants that reach navigable water many years after discharge and in highly diluted form. The Court rejected the environmental groups’ assertion that adding a “proximate cause” requirement would prevent this result. The Court noted that following the Ninth Circuit’s test would require a permit in “bizarre” situations such as pollutants carried to navigable waters by bird feathers. Congress intended, the Court continued, to leave substantial authority and autonomy to the States when it comes to groundwater pollution and nonpoint source pollution. Legislative history, the Court found, supports a conclusion that Congress was fully aware of the need to address groundwater pollution, but chose to leave this regulatory authority to the States. Finally, the EPA, for many years, has opposed applying permit requirements to discharges that reach navigable waters after many years. Although the Court did not defer to the EPA’s interpretation of the statute, it did note that a comparatively narrow view of the statute is administratively workable and provides some support for the view that Congress did not intend the Ninth Circuit’s broad interpretation.
The Court next rejected the position of the County and the Solicitor General as “too narrow,” risking serious interference with EPA’s authority to regulate point source pollution. The majority argued that under the County’s view, a pipe owner, seeking to avoid the permitting requirement, could simply move the pipe back a few yards so that the pollution has to travel through at least some groundwater before reaching the sea. The Court stated that it could not see that Congress intended such a “large and obvious loophole” in the law.
In transitioning to its holding, the Court noted that the courts and EPA have tried to find general language through the years to reflect a “middle ground” between “extremes” advocated by the parties. The Court concluded that Congress intended to “provide federal regulation of identifiable sources of pollutants entering navigable waters without undermining the States’ longstanding regulatory authority over land and groundwater.” The Court then issued its ruling:
We hold that the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge. We think this phrase best captures, in broad terms, those circumstances in which Congress intended to require a federal permit. That is, an addition falls within the statutory requirement that it be “from any point source” when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.
The Court went on to say that time and distance are important. If a pipe ends a few feet from the navigable waters and the pipe emits pollutants that travel those few feet through groundwater, the permitting requirement clearly applies. However, if the pipe ends 50 miles from navigable waters and the pipe emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters many years later, the permitting requirements likely do not apply.
And that leaves the vast majority of circumstances somewhere in the middle for the EPA and the lower courts to adjudicate. The Court acknowledged this difficulty, but stated that “there are too many potentially relevant factors applicable to factually different cases” for the Court to use more specific language. Instead, the Court provided a list of nonexclusive factors that “may prove” relevant:
- Transit time
- Distance traveled
- Nature of the material through which the discharge traveled
- Extent to which the pollutant is diluted or chemically changed as it travels
- The amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source
- The manner by or area in which the pollutant enters the navigable waters
- The degree to which the pollution (at that point) has maintained its specific identity
The Court noted that time and distance will be the most important factors in most cases, but not necessarily every case. The lower courts, the Court continued, will provide guidance through decisions in individual cases, leading to more refined principles “sometimes useful,” even in an era of statutes. The Court also noted that the EPA can provide guidance (within these boundaries) through examples, grants of individual permits, promulgation of general permits, or the development of general rules. The Court addressed the County’s and Government’s concern about the expansion of permitting authority by noting that tools to mitigate such harms include general permits and issuing permits based on best practices. The Court also noted that judges can mitigate hardship or injustice by setting penalties that take into account “good faith efforts to comply with the Act.”
The Court vacated the Ninth Circuit’s judgment and remanded for further proceedings.
Although he joined the Court’s majority opinion, Justice Kavanaugh wrote a separate concurrence to emphasize that he believed the opinion adhered to Justice Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). Justice Scalia had stated in Rapanos that polluters cannot evade the permitting requirements of the law simply by discharging their pollutants into non-covered intermittent watercourses that lie upstream of covered waters. This, Justice Kavanaugh reasoned, was why the County’s position was untenable. The fact that the pollutants from the County’s wastewater facility reach the ocean via an indirect route does not itself exempt the County from a permitting requirement. Kavanaugh also stressed that the source of vagueness regarding when a pollutant has come “from” a point source is the statutory text, not the Court’s opinion. Finally, Justice Kavanaugh urged that the Court’s emphasis on time and distance will help guide application of the statutory standard going forward.
Dissenting from the majority opinion were Justices Thomas, Gorsuch, and Alito. Justice Thomas wrote a dissenting opinion in which Justice Gorsuch joined. Justice Alito dissented separately.
Justice Thomas, using a textual argument, asserted that the operative word in the statute was “addition,” not “from.” He stated that when a point source releases pollutants to groundwater, the groundwater has been augmented with pollutants from the point source. But, when the pollutants eventually reach navigable water, one would not naturally say that the navigable waters have been augmented with pollutants from the point source. Rather, the augmentation occurs with pollutants from the groundwater. This, Justice Thomas argued, supports the conclusion that the statute excludes anything other than a direct discharge. Justice Thomas warned that construing the EPA’s power to regulate point sources to allow the agency to regulate nonpoint sources and groundwater is in serious tension with Congress’ design. Justice Thomas concluded that the best reading of the statute made a remand unnecessary. A “discharge” is the release of pollutants directly from a point source to navigable waters. All parties agreed that the pollutants did not enter the navigable water directly, but through groundwater. As such, Justice Thomas concluded, there was no “discharge” and no need for a permit.
Justice Alito authored a blistering dissent, beginning with the rebuke, “If the Court is going to devise its own rules, instead of interpreting those enacted by Congress, it might at least adopt rules that can be applied with a modicum of consistency. Here, however, the Court makes up a rule that provides no clear guidance and invites arbitrary and inconsistent application.”
Justice Alito argued that there are only two ways to read the text:
- A pollutant that reaches the ocean could be understood to have been added “from” a pipe if the pipe originally discharged the pollutant and the pollutant eventually made its way to the ocean by flowing over or under the surface of the ground, or
- A pollutant that reaches the ocean could be understood to have come “from” a pipe if the pollutant is discharged from the pipe directly into the ocean.
Justice Alito asserted that the majority believes both alternatives lead to unacceptable results, so it tried to find a middle way. In so doing, it created a test that was not a plausible interpretation of the text and that has no clear meaning. He stated that the Court’s advice to the lower courts is, in essence: “That’s your problem. Muddle through as best you can.”
Justice Alito pointed out that despite nearly five decades of notice that effluent from the Maui facility would make its way, via groundwater, to the ocean, neither the EPA nor the Hawaii Department of Health required NPDES permitting of the wells. In fact, none of the more than 6,600 injection wells in Hawaii currently has an NPDES permit.
Justice Alito summarized the law at issue as follows: A permit is required when a pollutant is added to navigable waters from a point source. The parties agreed that most of these elements are met; however, the question was whether the emission of the effluent from the wells qualified as a “discharge,” or “the addition of a pollutant ‘from’ a point source.” The Court’s rule, Alito explained, does nothing to guide “middle instances.”
Except in extreme cases, dischargers will be able to argue that the Court’s multifactor test does not require a permit. Opponents will be able to make the opposite argument. Regulators will be able to justify whatever result they prefer in a particular case. And judges will be left at sea.
Justice Alito then argued that the best interpretation of the statute is that a permit is required when a pollutant is discharged directly from a point source to navigable waters. This, he contended, was consistent with the statutory language and better fit the overall scheme of the CWA. Justice Alito argued that many times a discharge made close to navigable water would be a direct discharge to another point source, such as a ditch or a channel, that discharges directly into navigable waters, thus requiring a permit. Read this way, the term “point source” would have a broad reach and would cover many of the cases that troubled the majority. Justice Alito also pointed out that if the discharges were not reached by the CWA, they would be regulated by the States as non-point source discharge.
Justice Alito urged that a bright-line test is consistent with the CWA’s remedial scheme because the Act imposes strict liability, backed by criminal penalties and steep civil fines. The CWA authorizes as much as $54,833 in fines per day and contains a five-year statute of limitations. The citizen suit provisions only exacerbate the danger to ordinary landowners. Even if the regulators agree that a permit is not needed, a citizen suit could result in a very costly judgment.
Justice Alito concluded:
The Court adopts a nebulous standard, enumerates a non-exhaustive list of potentially relevant factors, and washes its hands of the problem. We should not require regulated parties to feel their way on a case-by-case basis where the costs of uncertainty are so great. The Court’s decision invites arbitrary and inconsistent decision-making. And that’s not what the Clean Water Act contemplates.
Justice Alito would have reversed the judgment and remanded for application of his bright-line test.
The Court issued its opinion two days after the EPA and the U.S. Army Corps published the new Navigable Waters Protection Rule.iii This new rule—three years in the making—attempts to clarify the definition of “waters of the United States.” Clean Water Act jurisdiction extends only to waters and wetlands that meet this test. The new rule was issued in response to years of nearly universal concern that current guidance lacked sufficient clarity. In the preamble to the new rule, the agencies state, “This final definition increases the predictability and consistency of Clean Water Act programs by clarifying the scope of ‘’waters of the United States’’ federally regulated under the Act.” The new rule eliminates the case-specific application of the agencies’ previous interpretation of Justice Kennedy’s “significant nexus” test in the Rapanos guidance, and establishes clear categories of jurisdictional waters. The “significant nexus” test was broadly maligned from nearly all sides: A legal test, good in theory, but offering little in the way of consistency and predictability. The Maui Court’s “functional equivalent” test seems no different.
We will be watching in the months to come as EPA wrestles with new guidance reflecting the Maui County decision. We would also expect a new surge of citizen suits demanding NPDES permits for discharges that have, in the past, been considered by most to be nonpoint source discharges.
[i] Federal Water Pollution Control Act, §§301(a), 502(12)(A), as amended by the Federal Water Pollution Control Act Amendments of 1972 (Clean Water Act) §2, 86 Stat. 844, 886, 33 U. S. C. §§1311(a), 1362(12)(A).
[ii] Hawai‘i Wildlife Fund v. Cnty. of Maui, 886 F.3d 737 (9th Cir. 2018).
iii. The legal challenges to the new rule have already begun, with environmental groups, 17 states, and a ranchers' organization already filing lawsuits.
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